Correlation Between Firsthand Alternative and Tiaa-cref Small-cap
Can any of the company-specific risk be diversified away by investing in both Firsthand Alternative and Tiaa-cref Small-cap at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Firsthand Alternative and Tiaa-cref Small-cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Firsthand Alternative Energy and Tiaa Cref Small Cap Blend, you can compare the effects of market volatilities on Firsthand Alternative and Tiaa-cref Small-cap and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Firsthand Alternative with a short position of Tiaa-cref Small-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firsthand Alternative and Tiaa-cref Small-cap.
Diversification Opportunities for Firsthand Alternative and Tiaa-cref Small-cap
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Firsthand and Tiaa-cref is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Alternative Energy and Tiaa Cref Small Cap Blend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa-cref Small-cap and Firsthand Alternative is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Firsthand Alternative Energy are associated (or correlated) with Tiaa-cref Small-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tiaa-cref Small-cap has no effect on the direction of Firsthand Alternative i.e., Firsthand Alternative and Tiaa-cref Small-cap go up and down completely randomly.
Pair Corralation between Firsthand Alternative and Tiaa-cref Small-cap
Assuming the 90 days horizon Firsthand Alternative Energy is expected to under-perform the Tiaa-cref Small-cap. But the mutual fund apears to be less risky and, when comparing its historical volatility, Firsthand Alternative Energy is 1.13 times less risky than Tiaa-cref Small-cap. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Tiaa Cref Small Cap Blend is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 2,533 in Tiaa Cref Small Cap Blend on August 28, 2024 and sell it today you would earn a total of 227.00 from holding Tiaa Cref Small Cap Blend or generate 8.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firsthand Alternative Energy vs. Tiaa Cref Small Cap Blend
Performance |
| Timeline |
| Firsthand Alternative |
| Tiaa-cref Small-cap |
Firsthand Alternative and Tiaa-cref Small-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firsthand Alternative and Tiaa-cref Small-cap
The main advantage of trading using opposite Firsthand Alternative and Tiaa-cref Small-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firsthand Alternative position performs unexpectedly, Tiaa-cref Small-cap can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Tiaa-cref Small-cap will offset losses from the drop in Tiaa-cref Small-cap's long position.| Firsthand Alternative vs. Guinness Atkinson Alternative | Firsthand Alternative vs. Calvert Global Energy | Firsthand Alternative vs. New Alternatives Fund | Firsthand Alternative vs. Shelton Green Alpha |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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